Thursday, February 2, 2012

Good news, bad news

“The prospects look good for a growing economy in 2012 and I think foreign investments will increase substantially,” John Forbes, senior adviser of the American Chamber of Commerce, told the Business Mirror on 24th Jan 2012 . . . He said the growing optimism was mirrored by the rising number of foreign companies asking how they could move their operations here.”

On the same day, the writer was with a friend in the BPO business and with them was an American who was setting up, for the umpteenth time, a local operation for his American principal. It stemmed from a decision to move their India operation to the Philippines. Not surprising given what Gerardo P. Sicat wrote:

“National economy: one part world class, the main bulk is uncompetitive.” The Philippine economy is made up of two parts. One part is world class but the main bulk of it is uncompetitive . . . Let’s first take the bulk of the nation’s economy. Four-fifths of it is burdened by high costs. In general, public utility services are sold at high unit costs. Public infrastructures are inadequate, overstressed and underinvested. The business regulatory framework is impeded by corruption, rent-seeking, and involves multiple steps that jack up production costs. All these make operating enterprises weighed by high costs . . . One-fifths of the economy is world class. Here, firms are generally profitable, workers have high productivity and raw material inputs are available at world prices. As a result, the enterprises operating in them are lean, mean, and highly competitive. These enterprises are located in special economic zones . . . But this world class segment is also burdened by the inadequacies of the larger component of the economy. Infrastructure services and other non-traded goods add to the burdens of these world class components and chip away partly on their performance.” [Crossroads by Gerardo P. Sicat, The Philippine Star, 25th Jan.]

Juan de la Cruz is neither here nor there? "The slow pace in the integration of renewable power sources into the overall power supply of the country is also not the fault of Almendras. As we have underscored a few times, he is facing formidable opposition in his bid to push the country’s renewable energy program which PNoy has advocated . . . Given the names behind the move against renewable energy, we can only sympathize with Almendras. Among these big names are former energy secretaries: former President Ramos’ energy czar Delfin Lazaro and the Arroyo administration’s Raphael “Popo” Lotilla.” [Hidden Agenda, Mary Ann Ll. Reyes, The Philippine Star, 25th Jan.]

Do we have the capacity to move the Philippines forward as an economy? This was lurking at the back of the writer’s mind given all the above. He was talking to two physicians and in jest the writer said he was not even smart enough to be a doctor. (But why are you in the BPO business?) It only confirmed we've mismanaged our economy so bad for decades that doctors out of our premier university (UP) would not be practicing their profession. And they would add: “We would be doing others a favor, particularly nurses, if we train them in medical coding! These nurses pay tuition to get practical experience in a hospital with no guarantee of employment. If we could get them jobs . . . that will be a big plus.”

The writer was wondering if he was still jetlagged hearing all this. And he could only think of Warren Buffett – who says he is willing to pay more taxes because he's born lucky. “I am lucky to have won the ovarian lottery, and doubly lucky that I was born in this country.”

And the writer tells the two Filipino physicians that he would help them develop a product architecture and product portfolio – i.e., competitiveness is simply that their mindset and business model aren't stuck in passive mode, but ratcheted up to proactive mode. They had explained that the medical transcription business has been overtaken by technology. And the writer was truly impressed that indeed these UP grads are smart. They engaged him on specific ways to move their BPO business up the value chain. If we could only focus on the four-fifths of our economy – and fix them in short order we could truly predict boom times! Until then, we’re simply crying wolf!

Genesis of this Blog

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Advocacy

About Me

I started writing to columnists and newspaper editors at the end of a trip to the Philippines over Holy Week in 2008 – to echo the frustrations expressed by friends and relations that were much louder and more intense than prior trips. My first thought was: with so much talents and skills how could the country be the basket case of Asia? Are we simply too nice as a people? Since then I have kept abreast with local news and opinions.
I have been a business consultant (since 2003) focused on Eastern Europe. My principal client in Bulgaria, a consumer-products maker, was chosen by the European Business Awards in 2011 as among Europe’s best from the 15,000 companies vetted for the selection. I started my career in 1968 in human resources in the Philippines. I then joined a Fortune 500 company in 1981, working with its Manila subsidiary for seven years and later moved up to its Asian regional headquarters and finally assumed a global responsibility (in global strategy, organization and business competitiveness) until my retirement. I have likewise done consulting work in the Philippines. I live with my family in Stamford, Connecticut, USA.